US Defence Policy And Planning: What To Expect Next?

US defence policy and planning will increasingly focus on preparing for possible military conflict with China. The trade war between the two could accelerate tensions and planning on both sides.

The policy will be more transactional, requiring allies and partners to assume greater responsibility for defending their countries and regions, underwriting the costs of US bases and activities, and expecting them to continue to buy US equipment in large volumes.

At home, there will be attempts to refocus US defence towards better securing and defending the US homeland. The DoD will need to square the circle between the trillion-dollar defence budget Trump has mooted and the cost-cutting exercises in train. Key areas for investment will include accelerating force modernisation and missile defence.

Some of these strands could overlap or combine this Summer: at the NATO Summit in June, in the event of a ceasefire in Ukraine (or major falling-out between the US and Russia) and in case of major Israeli strikes against Iran’s nuclear facilities.

A new National Defence Strategy is due to be completed by the end of August. We should expect a short, punchy document setting out principles, tasks and priorities rather than a detailed blueprint for future US force structure and capabilities.

Policy Approach

During the first 100 days of the President Trump’s second presidency, his economic policy approach and foreign policy priorities became clearer, with the contours of his defence policy now firming up to become increasingly consequential as the year progresses.

As well as the ‘America First’ principle, key themes of US defence policy include: stopping current wars and preventing new ones; restoring US military strength and rebuilding the US defence industrial base; requiring allies and partners to pay more for their own defence and their regions’ security; strengthening US borders and stepping up protection against potential missile attacks on the US; and rebalancing US capability planning and force posture to prepare for a future conflict with China – as ‘the pacing threat’.

The Washington post reported in March the headlines of a secret internal planning document, the Interim National Defence Strategic Guidance, which provides a prioritisation framework for officials to turn these defence policy themes into plans, activities and operations.

The assessment in the executive summary above assumes a relatively orderly approach to implementation of this policy approach. Trump’s approach to foreign policy, tariffs and trade show that he is prepared to take significant risks. It remains to be seen whether his approach to defence will remain within the contours that have emerged so far.

At the start of May, Defence Secretary Hegseth issued a memorandum directing the development of a new National Defence Strategy to help deliver Trump’s twin imperatives of putting ‘America First’ and delivering ‘Peace Through Strength’. It is due to be completed by the end of August, with an unclassified version probably available in September.

Use of Military Force

Tump authorised the first military action of this administration, against the Houthis in Yemen, in March. US-led attacks increased in scale over several weeks. On 6th May Trump announced that the Houthis had agreed to stop attacks against international shipping in the Red Sea, and in response he was suspending attacks against Houthi targets in Yemen. The Houthis have subsequently said that attacks against Israel will continue. There is speculation that this ‘truce’ will end after Trump’s tour to the Gulf this week concludes.

To understand Trump’s attitude to the military instrument requires looking back to his first term. In 2017, Trump inherited a major coalition campaign already underway against ISIS, but US operations against the organisation intensified and culminated under his leadership. He eventually presided over its final territorial defeat in Syria in 2019 (and, with some fanfare the special forces operation which led to the death of its leader Abu Bakr Al-Baghdadi). The coalition later assessed at least 80,000 ISIS casualties during operations against the organisation.

Publicly hostile to long-term military commitments, beyond the Counter-ISIS campaign, Trump authorised relatively few military operations in his first term – but those he did sign-off were significant (notably strikes against Bashar Al-Assad’s Syria after use of chemical weapons and the targeted killing of IRGC Quds Force Commander Qassem Soleimani).

Despite his own personal interest in being perceived as a peacemaker, he could be prepared to resort to the military instrument more regularly – and potentially at scale – during his second term if he judges that circumstances require such responses. As well as the operations against the Houthis, the US bombed targets in Somalia, Iraq and Syria in the past three months.

Trump will want to avoid the military entanglements and longer-term commitments of which he has been so dismissive. So, he will prefer the precise and occasional use of naval and air power – and particularly stand-off missile strikes – to the use of land forces wherever possible.

The build-up of US forces in the Middle East now underway would provide the capability to undertake a range of operations if circumstances required. The US is actively discouraging Israel from any attack against Iran’s nuclear programme this summer and is investing heavily in diplomacy designed to reach a new nuclear deal with Iran. But in the event that Israel ignores this counsel and mounts independent large-scale attacks against Iran, and Iran retaliates at scale, it seems likely that the US would be drawn into the conflict. Any such conflict could well be protracted.

Beyond the Middle East, the US has been clear that it will not provide a ‘backstop’ security guarantee for Ukraine or support for a European assurance force in the event of a ceasefire or peace deal there. More broadly, the US commitment to the NATO Article V guarantee seems weaker than at any time since it was agreed.

Closer to the US, DoD planners have been asked to draw up options to increase the US troop presence in Panama. Defence Secretary Hegseth visited last month and has spoken of ‘reviving’ US military bases there. Further covert US military action against the cartels in Mexico and Venezuela seems possible – surveillance operations over Mexico are being stepped-up and the US military is taking control of land along the US-military border. Ecuador’s president said recently that he would welcome US military assistance in his ‘war’ against the cartels.

Direct US military action against Greenland seems unlikely, but it would not be surprising to see the US military presence at its space base there being increased, perhaps quite substantially. That would enable the US to declare effective military control over Greenland if circumstances required it – in US eyes. A US military attack against Canada seems inconceivable; continuing economic coercion seems highly likely.

Neither the US nor China want to go to war over Taiwan. But both are actively preparing for major operations in that area. The risks are increasing sharply.

The People

As with other areas, major US defence policy decisions will continue to be made by Trump and his immediate inner circle. But Trump has no background in defence, the DoD is a huge, complex bureaucracy and defence planning is a long-term business. So, the top team in the Pentagon should have increasing influence as Trump’s second term progresses.

However, Defence Secretary Hegseth and his deputy, Stephen Feinberg, have little relevant defence experience (Hegseth’s position is also in doubt after his own role in the ‘Signal’ controversy, as well as firing several of his own personal advisers). On the military side, having removed Charles Brown as Chairman of the Joint Chiefs, Trump has replaced him with a retired 3-star Air Force officer, Dan Caine, who has now been confirmed by the Senate. He has also removed a string of other senior military personnel and national security staff. There are concerns that, after public disagreements with a series of strong-minded Defence Secretaries and Chairmen during his first term, Trump is appointing figures who will demonstrate the personal loyalty he prizes – and be less likely to obstruct his plans.

The major contours of US defence policy are instead likely to be set by Elbridge Colby, who was confirmed by the Senate last month as Under Secretary for Defence Policy. He is a China hawk and critic of European defence spending. He will reinforce arguments for re-setting US defence policy, posture and planning towards preparing for a conflict with China. He will argue for withdrawing some US forces from Europe and spoke last week about the need for the Europeans to assume much greater responsibility for and focus more directly on security in this region. He supports AUKUS in principle but has suggested that the US will need to re-think its commitment to providing Virginia-class submarines to Australia in advance of building up the US attack submarine fleet.

Colby will author the new US National Defence Strategy. The strategy he produced in 2018 was well regarded, including for its qualities of brevity and clarity. We should expect another short, punchy document setting out principles, tasks and priorities for US defence rather than a detailed blueprint for future US force structure and capabilities. The prospectus he spoke to at Policy Exchange last summer and during his Senate confirmation hearing will likely be reflected in this new strategy.

Above the Pentagon, four figures other than Trump will be particularly influential. Vice President Vance’s position on European security and disdain for allies is very clear. On defence matters, we should expect him to be aligned with the positions Colby is advocating. Analysts in the defence community hold that Stephen Miller, Trump’s Deputy Chief of Staff for Policy sees major reductions in the defence budget as possible, and that Russell Vought, the director of the Office for Management and Budget, shares his view. Elon Musk’s views are starker still, although he now seems to be losing ground and influence as he steps back from his role in the Department of Government Efficiency (DOGE). Nonetheless, we expect the cost-cutting and efficiency initiatives he set in motion will continue to influence federal agencies, including DoD.

This quartet is likely to be influential and hands-on in the approach Trump takes to driving through plans to re-set military commitments overseas and reform US defence at home. It remains to be seen whether Marco Rubio or whoever succeeds him as NSA chooses to play a major role in setting defence policy.

Re-setting US Defence Overseas

The European theatre will be an early test-case for how the US intends to re-set its overseas commitments. A set of steps/measures could include:

• Withdrawing progressively up to a third of current US combat forces from Europe, mainly from Germany, potentially some from UK, Poland, Italy and Spain, and rotational forces from the Baltics and Romania.
• Progressively withdrawing key capabilities and enablers, particularly command and control capabilities, air defence, armour and artillery, deep strike capabilities, air and space-based ISR, AAR and transport aircraft.
• Explicitly linking a US commitment to Article V only to those allies that satisfy certain conditions, including levels of defence spending.
• More radically, and less formally, the US nuclear guarantee could be diluted by equivocation about using US nuclear weapons in the defence of Europe.

Some capabilities and enablers would be redeployed to the Asia-Pacific theatre, others would return to the US. More importantly, US contingency planning seems likely to quite significantly adjust downwards assumptions about the scale of reinforcements the US would be prepared to deploy to Europe in the event of a major crisis there. In the scenario above, the US would continue to sell platforms, weapons and other systems to European nations (insofar as they wish to buy them in future) and provide effective support to in-service capabilities and systems.

Secretary of State (now also NSA) Rubio offered European members of NATO reassurances in Brussels at the start of April that the US would re-set its approach to European security in a measured way. And some US figures, including outgoing SACEUR, General Cavoli, are stressing that a strong US presence in Europe contributes to US national security by defending the US homeland forward, allowing the US to project combat power globally, and deterring Russian aggression.

But from Trump down, senior US figures are united behind the demand the European members of NATO should spend 5% of their GDP on defence and take greater responsibility for the defence of Europe. Most will regard this target as an unrealistic negotiating ploy. NATO Secretary General Rutte is working to find creative ways to bridge this gap. These issues could well come to a head at the NATO Summit in the Hague between 24-26 June.

There would be a major gap to fill in the second half of this decade as and when the US enacts the changes set out above – or goes further. Major European defence players are reportedly drawing up plans to take on greater responsibilities for the continent’s defence, on the basis of a managed transfer over the next 5-10 years.

Given the current US military build-up in the Middle East region and the growing possibility of a major crisis there this year, we do not expect the US to make any significant adjustments to the current US basing-arrangements in the region until after this tension has subsided – or the crisis has played itself out (though the US military presence in Syria is being trimmed). Thereafter, the US is likely to continue to adopt a mercantile approach to US military presence in the region, maintaining bases and forces in countries who pay for those bases and buy significant amounts of US military equipment. Trump will be well satisfied with the major financial commitments he received from leaders in the Gulf this week.

Reforming US Defence

The picture on reforming US defence at home is less clear. Some announcements have been contradictory. One of Hegseth’s first moves was to announce that he would significantly re-balance US defence towards Trump’s new national security priorities, and remove 8% of the budget, circa $50 billion, allocated to non-core activities over the next five years. A major set of programmes that would be exempted from these measures, including the nuclear programme, Virginia-class submarines, uncrewed systems and the Air Force’s emerging uncrewed fighter jet program, surface ships, cybersecurity, munitions and homeland missile defence.

Together this list of programmes accounts for the vast majority of the DoD’s equipment spend. It follows that, in order to deliver these reductions, the DoD would need to take an aggressive approach to delivering the core programmes more cost-efficiently, cutting back non-core programmes and reducing the costs of the civilian and contractor workforce.

Two constituencies will potentially stand in the way of this approach. The defence-industrial complex in the US has adapted slowly over the past several decades, despite the reformist zeal shown by more effective teams than the new management in the Pentagon. And Congress has always played a significant role in the oversight of defence policy, plans and particularly the defence budget. Senior Republicans might yet find their voices on these issues.

At the end of last month, Trump spoke of increasing the US defence budget to $1 trillion (up from circa $890 billion this US financial year). Neither the DoD nor White House has provided any detail on how this uplift would be spent. The ‘Golden Dome’ missile defence system Trump has spoken of could absorb a significant element, as would widespread force modernisation. The defence budget request for the year ahead is expected in the near future.

Overall, the picture on US defence should be clearer by the end of the summer, when several of the issues described above will have developed or played-out.

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